| (a) Definitions. The following words and terms, when
used in this section, have the following meanings unless the context
indicates otherwise:
(1) Construction or extension--Does not include the
purchase or condemnation of real property for use as facility sites
or right-of-way. Acquisition of right-of-way must not be deemed to
entitle an electric utility to the grant of a certificate of convenience
and necessity without showing that the construction or extension is
necessary for the service, accommodation, convenience, or safety of
the public.
(2) Generating unit--Any electric generating facility.
This section does not apply to any generating unit that is ten megawatts
or less and is built for experimental purposes only.
(3) Habitable structures--Structures normally inhabited
by humans or intended to be inhabited by humans on a daily or regular
basis. Habitable structures include, but are not limited to: single-family
and multi-family dwellings and related structures, mobile homes, apartment
buildings, commercial structures, industrial structures, business
structures, churches, hospitals, nursing homes, and schools.
(4) Municipal Power Agency (MPA)--Agency or group created
under Texas Utilities Code, Chapter 163 - Joint Powers Agencies.
(5) Municipal Public Entity (MPE)--A municipally owned
utility (MOU) or a municipal power agency.
(6) Prudent avoidance--The limiting of exposures to
electric and magnetic fields that can be avoided with reasonable investments
of money and effort.
(7) Tie line--A facility to be interconnected to the
Electric Reliability Council of Texas (ERCOT) transmission grid by
a person, including an electric utility or MPE, that would enable
additional power to be imported into or exported out of the ERCOT
power grid.
(b) Certificates of convenience and necessity for new
service areas and facilities. Except for certificates granted under
subsection (e) of this section, the commission will grant an application
and issue a certificate only if it finds that the certificate is necessary
for the service, accommodation, convenience, or safety of the public,
and complies with the statutory requirements in the Public Utility
Regulatory Act (PURA) §37.056. The commission may issue a certificate
as applied for, or refuse to issue it, or issue it for the construction
of a portion of the contemplated system or facility or extension thereof,
or for the partial exercise only of the right or privilege. The commission
will render a decision approving or denying an application for a certificate
within one year of the date of filing of a complete application for
such a certificate, unless good cause is shown for exceeding that
period. A certificate, or certificate amendment, is required for the
following:
(1) Change in service area. Any certificate granted
under this section must not be construed to vest exclusive service
or property rights in and to the area certificated.
(A) Uncontested applications: An application for a
certificate under this paragraph must be approved administratively
within 80 days from the date of filing a complete application if:
(i) no motion to intervene has been filed or the application
is uncontested;
(ii) all owners of land that is affected by the change
in service area and all customers in the service area being changed
have been given direct mail notice of the application; and
(iii) commission staff has determined that the application
is complete and meets all applicable statutory criteria and filing
requirements, including, but not limited to, the provision of proper
notice of the application.
(B) Minor boundary changes or service area exceptions:
Applications for minor boundary changes or service area exceptions
must be approved administratively within 45 days of the filing of
the application provided that:
(i) every utility whose certificated service area is
affected agrees to the change;
(ii) all customers within the affected area have given
prior consent; and
(iii) commission staff has determined that the application
is complete and meets all applicable statutory criteria and filing
requirements, including, but not limited to, the provision of proper
notice of the application.
(2) Generation facility.
(A) In a proceeding involving the purchase of an existing
electric generating facility by an electric utility that operates
solely outside of ERCOT, the commission will issue a final order on
a certificate for the facility not later than the 181st day after
the date a request for the certificate is filed with the commission
under PURA §37.058(b).
(B) In a proceeding involving a newly constructed generating
facility by an electric utility that operates solely outside of ERCOT,
the commission will issue a final order on a certificate for the facility
not later than the 366th day after the date a request for the certificate
is filed with the commission under PURA §37.058(b).
(C) An electric utility operating solely outside of
the ERCOT region may, but is not required to, obtain a certificate
to install, own, or operate a generation facility with a capacity
of 10 megawatts or less.
(3) Electric transmission line. All new electric transmission
lines must be reported to the commission in accordance with §25.83
of this title (relating to Transmission Construction Reports). This
reporting requirement is also applicable to new electric transmission
lines to be constructed by an MPE seeking to directly or indirectly
construct, install, or extend a transmission facility outside of its
applicable boundaries. For an MOU, the applicable boundaries are the
municipal boundaries of the municipality that owns the MOU. For an
MPA, the applicable boundaries are the municipal boundaries of the
public entities participating in the MPA.
(A) Determination of need:
(i) Economic projects. Except as otherwise stated in
this subparagraph, the following must be met for a transmission line
in the ERCOT region. The applicant must present an economic cost-benefit
study that analyzes the transmission project under a congestion cost
savings test and a production cost savings test. The commission will
give great weight to such a study if it is conducted by the ERCOT
independent system operator. Adequately quantifiable and ongoing direct
and indirect costs and benefits to the transmission system attributable
to the project may be included in the cost-benefit study.
(I) Congestion cost savings test. ERCOT, in consultation
with commission staff, must develop a congestion cost savings test.
(-a-) The congestion cost savings test must include
an analysis of whether the levelized ERCOT-wide annual congestion
cost savings attributable to the proposed project are equal to or
greater than the average of the first three years annual revenue requirement
of the proposed project of which the transmission line is a part.
(-b-) Prior to the effective date of the test developed
by ERCOT under this subclause ERCOT may immediately, without updating
its current protocols, utilize the generator revenue reduction test,
effective Dec. 1, 2011 under ERCOT Nodal Protocols §3.11.2(6),
as the congestion cost benefit test required under this clause. ERCOT
may continue to rely upon completed calculations using the generator
revenue reduction test to evaluate ongoing applications after the
effective date of the test developed under this subclause.
(II) Production cost savings test. The production cost
savings test must include an analysis of whether the levelized ERCOT-wide
annual production cost savings attributable to the proposed project
are equal to or greater than the first-year annual revenue requirement
of the proposed project of which the transmission line is a part.
(III) Economic cost-benefit analysis must be studied
for the projected in-service date of the project using the study case
identified in the ERCOT planning guide.
(IV) ERCOT may recommend, and the commission may approve,
a transmission line in the ERCOT region that demonstrates a savings
under either a congestion cost savings test or a production cost savings
test.
(ii) Reliability projects.
(I) The requirements of clause (i) of this subparagraph
do not apply to an application for a transmission line that is necessary
to meet state or federal reliability standards, including: a transmission
line needed to interconnect a transmission service customer or end-use
customer; or needed due to the requirements of any federal, state,
county, or municipal government body or agency for purposes including,
but not limited to, highway transportation, airport construction,
public safety, or air or water quality.
(II) For a transmission line not addressed by clause
(i) of this subparagraph, the commission will consider, among other
factors, the needs of the interconnected transmission systems to support
a reliable and adequate network and to facilitate robust wholesale
competition. When evaluating reliability for a proposed project in
the ERCOT region, the commission will consider and any review conducted
by ERCOT must incorporate the historical load, forecasted load growth,
and additional load currently seeking interconnection. The forecasted
load growth and additional load currently seeking interconnection
must be substantiated by quantifiable evidence of projected load growth.
The commission will give great weight to:
(-a-) the recommendation of an organization that meets
the requirement of PURA §39.151; and/or
(-b-) written documentation provided by a transmission
service provider to ERCOT that the transmission line is needed to
interconnect transmission service or retail customers.
(iii) Resiliency. ERCOT may recommend, and the commission
may approve, a transmission project that is submitted as an economic
or reliability project and does not demonstrate sufficient economic
savings or reliability benefits to merit approval on those grounds
if ERCOT determines the line would address a resiliency issue identified
in the grid reliability and resiliency assessment required by subparagraph
(E) of this paragraph. In determining whether to approve such a project
the commission will consider:
(I) the margin by which the transmission project was
unable to demonstrate sufficient economic savings or reliability benefits
to merit approval on those grounds;
(II) whether the resiliency benefits the transmission
project would provide by reducing the impacts to customers of potential
outages caused by regional extreme weather scenarios are sufficient
to compensate for the project's inability to demonstrate sufficient
economic savings or reliability benefits to merit approval on those
grounds.
(III) the cost effectiveness of the transmission project's
ability to address the resiliency issue identified by ERCOT compared
to other possible solutions,
(IV) other factors listed in PURA §37.056(c),
as appropriate.
(B) Routing: An application for a new transmission
line must address the criteria in PURA §37.056(c) and considering
those criteria, engineering constraints, and costs, the line must
be routed to the extent reasonable to moderate the impact on the affected
community and landowners unless grid reliability and security dictate
otherwise. The following factors must be considered in the selection
of the utility's alternative routes unless a route is agreed to by
the utility, the landowners whose property is crossed by the proposed
line, and owners of land that contains a habitable structure within
300 feet of the centerline of a transmission project of 230 kV or
less, or within 500 feet of the centerline of a transmission project
greater than 230 kV, and otherwise conforms to the criteria in PURA §37.056(c):
(i) whether the routes parallel or utilize existing
compatible rights-of-way for electric facilities, including the use
of vacant positions on existing multiple- circuit transmission lines;
(ii) whether the routes parallel or utilize other existing
compatible rights-of- way, including roads, highways, railroads, or
telephone utility rights-of-way;
(iii) whether the routes parallel property lines or
other natural or cultural features; and
(iv) whether the routes conform with the policy of
prudent avoidance.
(C) Uncontested transmission lines: An application
for a certificate for a transmission line will be approved administratively
within 80 days from the date of filing a complete application if:
(i) no motion to intervene has been filed or the application
is uncontested; and
(ii) commission staff has determined that the application
is complete and meets all applicable statutory criteria and filing
requirements, including, but not limited to, the provision of proper
notice of the application.
(D) Projects deemed critical to reliability. Applications
for transmission lines which have been formally designated by a PURA §39.151
organization as critical to the reliability of the system will be
considered by the commission on an expedited basis. The commission
will render a decision approving or denying an application for a certificate
under this subparagraph within 180 days of the date of filing a complete
application for such a certificate unless good cause is shown for
extending that period.
(E) Grid reliability and resiliency assessment. ERCOT
must conduct a biennial assessment of the ERCOT power grid's reliability
and resiliency in extreme weather scenarios. Each assessment must:
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